Inflation could close the year 2023 at a rate of 27.3% +/-1.0.

According to research firm, IC Research, headline inflation would outperform the government’s upper target of 31.4% and central target of 29.4%.

It added that inflation will continue its downturn, with a non-linear trend.

“The pace of disinflation expectedly quickened in the second-half of 2023, helped by favourable base effect, moderation in food price pressures, diminishing impact of earlier tax hikes and post-January 2023 slowdown in the cedi’s depreciation. We also attribute the disinflation trend to the appropriately tight monetary policy stance, which includes the elimination of Central Bank financing of the Treasury’s budget deficit”.

“Having declined cumulatively by 18.9 percentage points to 35.2% in October 2023, we expect headline inflation to outperform the authorities’ upper target of 31.4% and central target of 29.4%, potentially closing full-year 2023 at 27.3% ± 1.0 percentage points”, it added.

It continued that it expects the declining momentum to continue in 2024 with the prevailing tight monetary stance and the ongoing IMF programme as key policy anchors.

“However, we anticipate an upside detour in March 2024, mainly due to unfavourable base drift effect given the unexpected decline in the CPI level in March 2023”, it explained.

From May to July 2024, it anticipates favourable base effect to set in and outweigh the seasonal food price shocks, exerting downward pressure on headline inflation into second half of 2023.

Inflation fell to 35.2% in October 2023

The year-on-year inflation for the month of October 2023 fell to 35.2% from the 38.1% recorded in September 2023.

Data from the Ghana Statistical Service (GSS) showed that the decrease in the general inflation rate can be attributed to the marginal drop in food inflation.

Food inflation in the period was 44.8%, while non-food inflation was 27.7%

In addition, inflation for locally produced item was 34.4% while imported items stood at 34.4% from 37.4% in last month.